Ford Motor Company (NYSE: F) shares advanced in late-morning trading on Tuesday, buoyed by an upgrade from DBS that highlighted the automaker's improved profit outlook. The stock climbed 1.9% to $14.12, reflecting renewed investor confidence in the company's turnaround strategy.
DBS analyst Elizabelle Pang raised her rating on Ford to Buy from Hold, setting a price target of $17.00. This implies a potential upside of approximately 20.4% from the stock's current level, surpassing the Street average target of $15.89. The new target aligns with those from JPMorgan, Piper Sandler, and UBS, signaling a growing consensus among some financial institutions.
The upgrade comes on the heels of Ford's revised 2026 guidance, announced two weeks ago, which raised its adjusted EBIT forecast to a range of $10 billion to $11 billion, up from the prior estimate of $8.5 billion to $10.5 billion. The company also lifted its adjusted free cash flow outlook to between $6 billion and $7 billion, compared to the earlier range of $5 billion to $6 billion.
During the second quarter, Ford delivered adjusted earnings per share of $0.42, beating analyst expectations of $0.35 by 21.3%. Revenue reached $48.30 billion, exceeding the consensus estimate of $45.47 billion by 6.2%. The company's adjusted EBIT for the quarter stood at $2.50 billion, a 17% increase from $2.10 billion in the same period last year. Adjusted free cash flow came in at $2.10 billion, and the company maintained a robust liquidity position with $43.4 billion in total liquidity and $22.3 billion in cash at the end of June.
Despite the positive momentum, Wall Street remains divided on Ford's prospects. Currently, seven analysts assign a Buy rating, seven recommend Hold, and one suggests Sell. This balanced sentiment reflects the ongoing debate over the sustainability of Ford's earnings growth. The price target range spans from $11 to $20, an 82% gap that underscores the uncertainty surrounding the company's financial trajectory.
Segment performance in the second quarter highlighted the strengths and challenges within Ford's portfolio. Ford Pro, the commercial vehicle unit, posted the strongest margin at 9.7%, with revenue of $17.8 billion and EBIT of $1.72 billion. Ford Blue, the traditional internal combustion engine segment, generated $26.1 billion in revenue and $1.14 billion in EBIT, a 4.4% margin. However, Ford Model e, the electric vehicle division, reported a loss of $919 million on revenue of just $1.0 billion, translating to a negative margin of 89.6%. This product mix underscores the financial strain of EV investments, which are expected to result in roughly $4 billion in losses for 2026, with tariffs anticipated to add nearly $1 billion in costs.
Ford's Chief Financial Officer, Sherry House, described the company's progress in straightforward terms. “Our industrial system is getting fitter,” she told journalists following the earnings report. The company also reported 1.6 million paid software subscriptions, a 50% increase year-over-year, highlighting growth in high-margin service revenue.
In a separate development, Ford appointed Mano Mannoochahr as its chief AI and data officer. Mannoochahr, who previously led data and AI initiatives at Verizon, called the move “a meaningful homecoming,” citing Ford's forward-looking vision as a key attraction. This appointment signals Ford's commitment to leveraging technology to enhance factory productivity and service revenue.
Despite the optimistic outlook, risks remain. Ford reported a 9.6% decline in U.S. sales for the first half of the year, and weaker demand for trucks could impact the business units that are financing the transition to electric vehicles. The company's ability to meet its ambitious EBIT target will depend on Ford Pro's continued margin strength offsetting Model e's losses while maintaining cash flow stability.
As of 11:40 EDT, Ford shares traded within a range of $13.84 to $14.18, with volume at 12.74 million shares, well below the typical daily average of 52.43 million. The stock remains 20.6% below its 52-week high of $17.78, suggesting room for recovery if the company delivers on its revised guidance.
